The U.S. economy reported its worst quarterly decline in modern history during the COVID-19 pandemic, with gross domestic product shrinking at an annual rate of 31.4% in the second quarter. The economy bounced back in the third quarter, but efforts to contain the virus’s spread throughout 2020 still resulted in a 3.5% annual economic contraction in the United States.
Arriving on the heels of a historic period of growth, COVID-19 brought about a decline in gross domestic product in every state in the country. However, no two state economies are alike, and partially as a result, some states were hit far harder than others.
Michigan is one of only eight states to report an economic decline greater than 5% in 2020. Economic output in the state fell by 5.4% from $471.6 billion in 2019 to $446.2 billion in 2020. Manufacturing was the largest drag on growth, with the sector’s output shrinking by 7.5% and detracting a net 1.4 percentage points from GDP.
Employment in Michigan’s manufacturing sector fell by 11% in 2020, more than double the sector’s 5% employment decline nationwide. Partially as a result, the number of people working in Michigan fell by 9.2% in 2020, well above the 5.8% national workforce reduction in 2020. Still, Michigan’s 4.9% unemployment rate remains considerably lower than the 6.1% U.S. rate.
States are ranked based on the percentage change in real GDP from 2019 to 2020. Data on GDP and industry-specific real GDP came from the BEA. Data on average annual employment and the seasonally adjusted monthly unemployment rate each came from the Bureau of Labor Statistics.
| Rank | State | Change in GDP, 2020 (%) | April 2021 unemployment (%) | Change in nonfarm employment, 2020 (%) |
|---|---|---|---|---|
| 1 | Hawaii | -8.0 | 8.5 | -9.4 |
| 2 | Wyoming | -7.0 | 5.4 | -4.1 |
| 3 | Oklahoma | -6.1 | 4.3 | -4.9 |
| 4 | New York | -5.9 | 8.2 | -10.3 |
| 5 | West Virginia | -5.5 | 5.8 | -6.6 |
| 6 | Louisiana | -5.5 | 7.3 | -1.8 |
| 7 | Vermont | -5.4 | 2.9 | -9.3 |
| 8 | Michigan | -5.4 | 4.9 | -5.8 |
| 9 | Alaska | -4.9 | 6.7 | -8.7 |
| 10 | Tennessee | -4.9 | 5.0 | -17.5 |
| 11 | New Hampshire | -4.7 | 2.8 | -6.7 |
| 12 | Nevada | -4.6 | 8.0 | -10.4 |
| 13 | Rhode Island | -4.5 | 6.3 | -8.8 |
| 14 | Wisconsin | -4.5 | 3.9 | -6.3 |
| 15 | Pennsylvania | -4.4 | 7.4 | 1.9 |
| 16 | Maine | -4.1 | 4.8 | -6.4 |
| 17 | Connecticut | -4.1 | 8.1 | -7.7 |
| 18 | New Jersey | -4.1 | 7.5 | -8.4 |
| 19 | South Carolina | -4.1 | 5.0 | -5.1 |
| 20 | Illinois | -4.0 | 7.1 | -7.1 |
| 21 | Ohio | -4.0 | 4.7 | -6.1 |
| 22 | Delaware | -3.9 | 6.4 | -6.0 |
| 23 | Massachusetts | -3.8 | 6.5 | -9.0 |
| 24 | Minnesota | -3.7 | 4.1 | -6.9 |
| 25 | Kentucky | -3.7 | 4.7 | -5.6 |
| 26 | Missouri | -3.6 | 4.1 | -4.8 |
| 27 | North Dakota | -3.5 | 4.2 | -6.7 |
| 28 | Texas | -3.5 | 6.7 | -4.3 |
| 29 | New Mexico | -3.1 | 8.2 | -6.7 |
| 30 | Indiana | -3.1 | 3.9 | -5.5 |
| 31 | Montana | -3.0 | 3.7 | -3.1 |
| 32 | Kansas | -3.0 | 3.5 | -4.6 |
| 33 | Florida | -2.9 | 4.8 | -5.2 |
| 34 | Oregon | -2.8 | 6.0 | -6.6 |
| 35 | Mississippi | -2.8 | 6.2 | -4.3 |
| 36 | California | -2.8 | 8.3 | -7.4 |
| 37 | Alabama | -2.7 | 3.6 | -4.3 |
| 38 | Maryland | -2.6 | 6.2 | -6.8 |
| 39 | Arkansas | -2.6 | 4.4 | -3.0 |
| 40 | Georgia | -2.5 | 4.3 | -4.6 |
| 41 | North Carolina | -2.5 | 5.0 | -4.3 |
| 42 | Virginia | -2.5 | 4.7 | -5.0 |
| 43 | Iowa | -2.3 | 3.8 | -5.1 |
| 44 | Nebraska | -2.1 | 2.8 | -3.6 |
| 45 | South Dakota | -1.7 | 2.8 | -3.4 |
| 46 | Colorado | -1.5 | 6.4 | -5.2 |
| 47 | Idaho | -1.1 | 3.1 | -0.7 |
| 48 | Arizona | -0.9 | 6.7 | -3.1 |
| 49 | Washington | -0.7 | 5.5 | -5.3 |
| 50 | Utah | -0.1 | 2.8 | -1.6 |
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